(a) An offer or sale of securities conducted solely in this state to a person who has established residency in this state, by an issuer in a transaction that meets the requirements of this section, is exempt from the requirements of 45.56.100, 45.56.170 – 45.56.230, and 45.56.550 and is subject to the following limitations:

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Terms Used In Alaska Statutes 45.56.130

  • administrator: means the commissioner of commerce, community, and economic development or a designee of the commissioner. See Alaska Statutes 45.56.900
  • agent: means an individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities or represents an issuer in effecting or attempting to effect purchases or sales of the issuer's securities. See Alaska Statutes 45.56.900
  • bank: means
    (A) a banking institution organized under the laws of the United States. See Alaska Statutes 45.56.900
  • broker-dealer: means a person engaged in the business of effecting transactions in securities for the accounts of others or for the person's own account. See Alaska Statutes 45.56.900
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • department: means the Department of Commerce, Community, and Economic Development. See Alaska Statutes 45.56.900
  • depository institution: means
    (A) a bank. See Alaska Statutes 45.56.900
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • filing: means the receipt under this chapter of a record by the administrator or a designee of the administrator. See Alaska Statutes 45.56.900
  • Fraud: Intentional deception resulting in injury to another.
  • investment adviser: includes a financial planner or other person that, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or that holds itself out as providing investment advice to others for compensation. See Alaska Statutes 45.56.900
  • investment adviser representative: means an individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or offers to provide investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing. See Alaska Statutes 45.56.900
  • issuer: means a person that issues or proposes to issue a security, subject to the following:
    (A) the issuer of a voting trust certificate, collateral trust certificate, certificate of deposit for a security, or share in an investment company without a board of directors or individuals performing similar functions is the person performing the acts and assuming the duties of depositor or manager under the trust or other agreement or instrument under which the security is issued. See Alaska Statutes 45.56.900
  • person: means an individual, a corporation, a partnership, a limited liability company, a limited partnership, a limited liability partnership, an association, a joint-stock company, a trust in which the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government. See Alaska Statutes 45.56.900
  • sale: includes every contract of sale, contract to sell, or disposition of a security or interest in a security for value, and "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to purchase, a security or interest in a security for value. See Alaska Statutes 45.56.900
  • security: means a note. See Alaska Statutes 45.56.900
  • sign: means , with present intent to authenticate or adopt a record,
    (A) to execute or adopt a tangible symbol. See Alaska Statutes 45.56.900
  • state: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Alaska Statutes 45.56.900
(1) the issuer of the security shall be a for-profit corporation, another for-profit entity, or a business cooperative, have its principal place of business in this state, and be licensed by the department;
(2) the transaction must meet the requirements of the federal exemption for intrastate offerings in 15 U.S.C. § 77c(a)(11) (Securities Act of 1933) and 17 C.F.R. § 230.147; the securities must be offered to and sold only to persons who have established residency in this state at the time of purchase; before any offer or sale under this exemption, the seller shall obtain documentary evidence from each prospective purchaser that provides the seller with a reasonable basis to believe the investor has established residency in this state;
(3) the sum of all cash and other consideration to be received for all sales of the security in reliance on this exemption may not exceed $1,000,000, less the aggregate amount received for all sales of securities by the issuer within the 12 months before the first offer or sale made in reliance on this exemption;
(4) the issuer may not accept more than $10,000 from any single purchaser unless the purchaser is an accredited investor as defined by 17 C.F.R. § 230.501;
(5) the issuer reasonably believes that all purchasers of securities are purchasing for investment and not for sale in connection with a distribution of the security;
(6) a commission or remuneration may not be paid or given, directly or indirectly, for any person’s participation in the offer or sale of securities for the issuer unless the person is registered as a broker-dealer, agent, investment adviser representative, or investment adviser under Alaska Stat. § 45.56.300 – Alaska Stat. § 45.56.350;
(7) the issuer of the security shall deposit in an escrow account in a bank or other depository institution authorized to do business in this state all funds received from investors until the minimum target dollar amount for the security offering is met; the issuer shall file the escrow agreement with the administrator, and the contents of the escrow agreement must include a statement that the proceeds of the sale under this section will not be released from the escrow account until the minimum target dollar amount for the security offering is met; all funds shall be used in accordance with representations made to investors;
(8) not less than 10 days before the use of any general solicitation or within 15 days after the first sale of the security under this exemption, if general solicitation has not been used before the sale, whichever occurs first, the issuer shall provide a notice to the administrator as prescribed in regulations for this section; the notice must specify that the issuer is conducting an offering in reliance on this exemption and must contain the names and addresses of

(A) the issuer;
(B) officers, directors, and any controlling person of the issuer;
(C) all persons who will be involved in the offer or sale of securities on behalf of the issuer; and
(D) the bank or other depository institution in which investor funds will be deposited;
(9) the issuer may not be, either before or as a result of the offering,

(A) an investment company as defined by 15 U.S.C. §§ 80a-1– 80a-64 (Investment Company Act of 1940), or subject to the reporting requirements of 15 U.S.C. § 78m or 78o (Securities Exchange Act of 1934); or
(B) a broker-dealer, agent, investment adviser representative, or investment adviser subject to Alaska Stat. § 45.56.300 – Alaska Stat. § 45.56.350;
(10) the issuer shall inform all purchasers that the securities have not been registered under Alaska Stat. § 45.56.100, 45.56.170 – 45.56.230, and 45.56.550 and may not be resold unless the securities are registered or qualify for an exemption from registration under Alaska Stat. § 45.56.110, 45.56.120, or 45.56.150; in addition, the issuer shall make the disclosures required by 17 C.F.R. § 230.147(f);
(11) the issuer shall require all purchasers to sign the following statement at the time of sale Sec.I acknowledge that I am investing in a high-risk, speculative business venture, that I may lose all of my investment, and that I can afford the loss of my investment”;
(12) this exemption may not be used in conjunction with any other exemption under this chapter, except the exemption to institutional investors under Alaska Stat. § 45.56.300 and 45.56.340 and for offers and sales to controlling persons of the issuer; sales to controlling persons may not count toward the limitation in (3) of this subsection;
(13) this exemption may not be construed to remove any person from the anti-fraud provisions under Alaska Stat. § 45.56.500 – 45.56.560, and the exemption may not be construed to provide relief from any other provision of this chapter other than as expressly stated.
(b) The administrator may by order deny or revoke the exemption specified in this section with respect to a specific security if the administrator finds that the sale of the security would work or tend to work a fraud on the purchasers of the security. An order under this subsection may not operate retroactively. A person may not be considered to have violated an order because of any offer or sale effected after the entry of an order under this subsection if the person sustains the burden of proof that the person did not know and, in the exercise of reasonable care, could not have known of the order.
(c) A person who makes application to the department for an exemption under this section shall be assessed a filing fee as prescribed in regulations for this section.
(d) In this section, “residency” has the meaning given in Alaska Stat. § 01.10.055.
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